Some games don't store user-specific data in their installations, but some do and that may lead to problems ranging from simply re-downloading files for current user or even mess up other your or other user's save data.
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user1306322Mar 2 '14 at 4:44

5 Answers
5

Very, very simple answer if you have the time to do this, and an NTFS file system*.

*Don't know what this is? Easy: Do you have Windows Vista or 7? If yes, then yes. If not, then "maybe", and you'll have to poke around to see. Disclaimer: This works on XP systems as well, but I haven't done it for a little while. Process for XP is different.

Work out the appropriate file placement, then if it's all lined up right and you've filled in all the info as it should be according to where your Steam is installed, and where your sister's games are, press enter.

Enjoy knowing that your sister's games are no longer taking room on your own hard drive.

Surprise Bonus Round!

Hey kids! Tired of your portable drive that you never unplug from having "performance issues"? This is because Windows tends to prevent disc write cache on any drive it's concerned may be unplugged without warning. By default, all USB drives count as this.

Want to milk better performance from it? Here's some easy steps*:

*Disclaimer: Though this process works on Windows Vista and Windows XP systems, it is slightly different to what is described below. Always use adult supervision when playing with your hardware settings!

Make sure your drive is connected to a high-speed USB port. It's not worth doing this on an old USB-1

Go to "My computer"

Right-click the drive you have plugged in. Click "Properties"

Go to "Hardware", and click on the drive you need to alter, and go to "Properties" again.

Under "Policies", turn to "Better Performance".

This now means that Windows will start using your USB drive as a high-performance drive, like the ones inside the case. This also means that "bad things" can happen if you pull the drive out, without using the built-in Windows "Safely Remove Hardware" button, found conveniently near your clock, in your System Tray.

Steam puts all the content of games into the same folder under itself. I would highly recommend that you simply download all the games that you'll want to play on the computer to it, which will require the various accounts logging in to initiate downloading. If later you want to move some of the content to another computer, you can backup, move, and restore them.

The Steam KB recommends against putting Steam on an external hard-drive for performance reasons. That said, from their move procedure, it sounds like you may be able to have Steam installed in two separate locations and launch whichever you would like to run. This may wreak havoc with some things, but if you must have separate installs for some reason, it's worth trying.

A suggestion: if you create separate user accounts on the computer for each of you, and install the Steam client in two different places, one for each account, I'll bet that would solve your problem more cleanly.

Installing Steam to 2 locations on the same computer is a Bad Idea (TM). Steam, like many other Windows programs, adds registry keys when installed. If all of these keys resided in HKEY_CURRENT_USER, then there probably wouldn't be a problem, but a quick search shows that there are some keys installed to HKEY_LOCAL_MACHINE.

The best option is to set up 2 user accounts in Windows, and use the same installation of Steam. All the games are installed to the same location. Any games that are not on the others account will only be playable by whoever owns the game. The reason for 2 user accounts in Windows is simply for save game purposes, as most games will put save games in a user's %APP_DATA% folder.